The Truth About My Notorious Waffle House Quote

The Truth About My Notorious Waffle House Quote

By Frank Rolfe

Several media outlets have recently used my old quote that the mobile home park “is like a Waffle House where the customers are chained to their booths”. However, they have taken the quote completely out of context, and the truth takes the air out of their sensationalism, unfortunately for them. So I would like to set the record straight before anyone else uses it inappropriately.

It was used to describe the incredibly consistent revenues of the mobile home park asset class

Mobile home parks have the most steady stream of income of any form of commercial real estate. That’s why they have the lowest loan default rate. Restaurants have the most inconsistent revenues of any business type – that’s why they have the highest failure rate of any enterprise in the U.S. Every day when you open your door to your restaurant, you have no idea if anyone will walk in or not. You buy the food to cook, hire the staff, turn on the lights and air-conditioning, but you may be doing it all in vain and your revenue forever after will be zero. My quote was meant to demonstrate the consistent revenue of the mobile home park model, by contrasting it to the weakest model, which is the restaurant (the “Waffle House”). It meant nothing more, and was actually a pretty easy to understand comparison, which is why the quote has had a lot of play.

But it really does cost a ridiculous amount of money to move a mobile home

Those who have been using the quote recently – completely out of context – say that it demonstrates that mobile homes can’t be moved. That is untrue: they can. However, it really does cost a ridiculous amount of money to move a mobile home. We should know, we pay to move more mobile homes than just about anybody else. It costs us about $5,000 to move, set, and connect utilities to a mobile home, and an additional $5 per mile in mileage charge. We wish it cost $500, but that’s not what the market dictates. How do you make sense of several guys and a specialized truck costing that much? Good question. It probably has to do with the fact that it’s nasty work and filled with liability exposure. Despite the money, nobody new seems to want to get into that line of work. So, yes, it is very expensive to move a mobile home.

But it costs a whole lot more to move a stick-built house

Before people complain of the cost to move a mobile home, don’t forget that it costs at least 10 times more to move a stick-built home, if it can be moved at all. At least the mobile home offers that option – no other housing type does. I saw a special on PBS once where they moved a multi-story house a few miles and it cost $50,000 or so. I think $5,000 is pretty reasonable in comparison, in the big picture.

But that does not mean that you can’t sell your home if you want to move – just like traditional stick-built homes

Going back to those that use my Waffle House quote incorrectly to claim it means that customers do not have any freedom of choice, that’s an absurd argument. Customers are not chained to their booths in a mobile home park any more than they are at a Waffle House. They always have freedom of choice. If they are unhappy, they can sell their mobile home, or move it. Millions of mobile homes have been sold in position, and more are sold every day. You don’t have to move your home to sell it, any more than you have to move a stick-built home to sell it. So the freedom of choice on where you live is always at the customers’ discretion. And they have the additional option of moving it, which the stick-built owner never has.

So why would you move a mobile home?

I’m not sure. It doesn’t really make much sense. About 95% of all mobile homes are never moved again after they are delivered by the factory. Since there is a ready market to buy existing mobile homes in position in mobile home parks, there is no reason to spend $5,000 to move one. And that simple economics is what makes the mobile home park’s occupancy and revenue so consistent.

So the “Waffle House” quote meant consistent revenue, not lack of freedom of choice?

Exactly. That’s what was being discussed when I gave that quote. And, while most people understand it in the correct context, there are those who are trying to use it in a completely context – and one that actually makes no sense. I’m not sure in what county you can legally chain the customer to their seats, but it’s not in the U.S. I’m consistently shocked that some media outlets believe that option is available.

Conclusion

I’m proud of the superior business model that mobile home parks have compared to other businesses and real estate niches. Consistent revenues are one of the key components of why most people get into the business. I’m sorry that people have tried to pervert the meaning of my quote, but I have no control over that. But at least now I’ve set the record straight.

Frank Rolfe has been an investor in mobile home parks for almost 30 years, and has owned and operated hundreds of mobile home parks during that time. He is currently ranked, with his partner Dave Reynolds, as the 5th largest mobile home park owner in the U.S., with over 250 communities spread out over 25 states. Along the way, Frank began writing about the industry, and his books, coupled with those of his partner Dave Reynolds, evolved into a course and boot camp on mobile home park investing that has become the leader in this niche of commercial real estate.

After a half a century of combined years in the real estate business, MHU.com is the only place that will give you the good, bad and the ugly details on Mobile Home Park Investing.